Business Aviation Performance Benchmarking
Key to Success: Business Aviation Performance Benchmarking
By Steve Brechter
Senior Advisor of Operations, Gray Stone Advisors
No doubt you’ve heard the buzz phrase “best in class” a thousand times. It sounds a bit over-the-top to hear an organization refer to itself as the best at something.
Unless, of course, it really is.
Now more than ever, it’s important to demonstrate your aviation organization’s performance. We in business aviation manage a significant asset base and must illustrate that we are managing it as effectively as—or better than—anyone else. Every asset employed must create value.
But, how do you know if your organization really is a top performer? How do you know how you’re doing compared to your peers? And, just how would you demonstrate this performance to corporate?
What is Performance Benchmarking?
Simply put, benchmarking is about defining what it takes to make you a top performer, understanding what your peers are doing, and assessing how you rank in comparison. For instance, you may think that your “dispatch reliability” is high, but is there someone out there whose rate is higher? Even though you might be meeting your budget, is there someone who’s doing what you’re doing for a lower spend?
Remember, CEOs talk to other CEOs, so you’ve got to have ready answers. If you’re not sure where to start, we’ve got you covered with a simple guide to benchmarking.
1. Define What’s Important
Step one in benchmarking is to define the key value points and determine what’s most important to measure. Make sure you’re aligned with the expectations of your parent company.
Many begin with the operating budget and the expectations of favorable budget performance. A simple cumulative line chart of the “budget plan” vs. “actual spend” shows the status clearly with respect to internal corporate expectations. Other types of “activity-based” measures might include “on-time arrivals” or “deadhead rate.”
Be clear about what you’re measuring and why it’s important. How will your business aviation operation determine specific elements of value as perceived by the enterprise?
“Value creation” is expressed in many ways. Some companies value the number of “client-facing opportunities,” others the number of “deals closed through the use of corporate aircraft.” These value points vary from company to company, so take the time to align with corporate and know what’s important to your senior leadership.
2. Reach Out
But how do you answer the question of your standing against industry peers? You won’t evaluate yourself solely against internal corporate targets. Instead, you must identify key measurements by which to compare yourself to others.
Participating in industry roundtables identifies benchmarking partners of similar mission, size, number of aircraft, basing, etc. Once you assemble the peer group, establish a commitment to confidentiality to protect private company data shared. Ensure that everyone in the group is measuring each attribute the same way.
For instance, when measuring “dispatch reliability,” you may consider an aircraft as “dispatchable” if it is on the line and ready for hand-off to flight operations two hours prior to launch. Clear definitions are vitally important.
It’s also important to level the playing field. Ensure all comparisons are relevant. You’ll likely need to normalize the data among the peer group by flight hours, number of aircraft, etc., to get an apples-to-apples comparison of your performance against others.
3. Identify Best Practices
Once you’ve received benchmarking data from the group, depict it in graphical format and identify differences between your business aviation organization and the others. There will undoubtedly be metrics both favorable and unfavorable to yours.
The key is to understand what makes certain peer organizations results favorable to yours. Such cases are likely driven by best-practices. For instance, one of your peer’s “maintenance labor-spend per technician” metric might be lower than yours. How do they manage it?
Future roundtables are an excellent platform to share best-practices that will be beneficial to all. That’s what benchmarking is all about.
We’ve just begun to scratch the surface of how effective business aviation performance benchmarking is done. It can actually be a lot of fun—and satisfying to circle back to the senior executive team and demonstrate that you truly are in the “best of” category!
Gray Stone Advisors combines their experience both in leading businesses as well as managing business aviation operations in order to provide flight department leaders with strategies for improvement. For more than 20 years, they’ve been “simplifying the business of business aviation” by working alongside all layers of aviation personnel, senior executives and family office representatives to help them become truly adept in all of the aspects of operating a business within a business.
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